Guinness Nigeria
Diageo, majority stakeholder in Guinness Nigeria, offloads shares to Tolaram
The 58.02% majority shareholder in Guinness Nigeria, Diageo, the renowned maker of Johnnie Walker whisky, has sold his srakes to Singapore-based consumer group Tolaram.
In spite of the shares sale, valued at N81.60 ($0.05) per share, Guinness Nigeria maintains its rights to manufacture and distribute Guinness, as well as other Diageo brands, including Johnnie Walker, Singleton, and Baileys.
According to Diageo, the deal aligns with its strategy to adopt a flexible and asset-light beer operating model, particularly in the Nigerian market.
A statement by Diageo CEO, Debra Crew, said the partnership with Tolaram is good and stressed the shared passion for Guinness and the Nigerian market.
“Guinness has been Nigeria’s favourite beer for nearly 75 years. Tolaram shares this passion for Guinness and for Nigeria, making them the perfect partners as we continue to grow our business and seek to delight even more consumers in the country,” the CEO said.
Indeed, which is finalised in Diageo’s fiscal year 2025, is however still contingent upon the fulfilment of certain conditions, including regulatory approvals in Nigeria.
Founde in 1948, Tolaram operates in many African, Asian, and Europeean countries. Specifically in Nigeria, it has joint ventures with multinational companies like Indofood, Kellanova, Dano, and Colgate-Palmolive.
Sajen Aswani, Tolaram’s CEO, highlighted the company’s long-standing presence in Nigeria and its commitment to future growth, stating, “Our partnership with Diageo to jointly grow Guinness Nigeria underscores our commitment to build on our strong presence and heritage in Nigeria, cultivated over decades of dedication and unwavering confidence in the future of Africa.”
Indeed, there is no doubt that this is coming at a difficult time for businesses in Nigeria, which has faced significant economic hurdles.
For the nine months ending March 31, 2024, Guinness Nigeria reported a 28% increase in revenue to N220.3 billion and a 27% rise in operating profit to N22.21 billion.
However, the company also recorded unrealized forex losses of N81 billion, primarily due to the devaluation of the Naira. Other companies, such as Nigerian Breweries, have also struggled, with plans to suspend production at two of its nine plants after posting a loss of N106 billion in 2023.
Diageo had initially planned to set up a wholly-owned subsidiary for some of its spirits brands in Nigeria by 2025.
However, Diageo will no longer use Guinness Nigeria to import and distribute its premium spirits as of October.
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